# Experience modification rate (EMR) explained

> What a workers' comp experience modification rate is, how NCCI and state bureaus calculate it, why GCs prequalify on it, and how a sub gets its EMR letter.

An experience modification rate (EMR), also called an experience mod or X-Mod, is a factor that adjusts a business's workers' compensation premium based on its own claims history compared with similar employers. A 1.00 is average, below 1.00 is a credit, and above 1.00 is a debit. General contractors use it as a quick signal of a subcontractor's safety record and often ask for it during prequalification.

## How is EMR calculated?

At a high level, the mod is adjusted actual losses divided by adjusted expected losses.

- **Expected losses** come from the employer's payroll in each class code, multiplied by an expected loss rate for that class.
- **Actual losses** come from the claims its insurers reported.
- **Primary and excess.** Each claim is split at a split point. The primary part, which reflects how often injuries happen, counts in full. The excess part, which reflects how large a claim is, counts only partly. So frequency weighs more than severity.
- **Medical-only claims.** In most NCCI states, the Experience Rating Adjustment counts only 30% of a medical-only claim, a 70% reduction.
- **Experience period.** Generally three years of payroll and losses, and never the current policy. NCCI's example: for a January 1, 2026 rating effective date, policies that started between April 1, 2021 and April 1, 2024 are used.
- **Eligibility.** A business gets a mod only when its premium meets the state's eligibility threshold. Smaller employers may have no mod at all.

## Who calculates it?

| Where the employer operates | Who produces the mod |
| --- | --- |
| Most states | NCCI |
| California, Delaware, Michigan, New Jersey, New York, Pennsylvania | The state's own rating bureau, such as the WCIRB in California |
| Indiana, Massachusetts, North Carolina | NCCI's plan applies, but the state bureau produces intrastate mods |
| Minnesota, Wisconsin | The state bureau, combined with NCCI states for employers in two or more |
| North Dakota, Ohio, Washington, Wyoming | The monopolistic state fund, under its own plan |

## Why do GCs prequalify on EMR?

A GC's own safety record and insurance costs depend partly on the subs it brings on site. The EMR is produced by a rating organization from insurer-reported data, not filled in by the sub, which makes it easy to compare. Prequalification forms commonly ask for the last three years of EMR, and many GCs set a maximum, often 1.0, with room to explain a higher number.

Read it with its limits in mind:

- **It lags.** A mod uses policies that began between 21 and 57 months before the rating date, so last year's injuries may not show yet.
- **Small firms swing.** One serious claim can move a small employer's mod a lot.
- **No mod is not a bad mod.** A business below the eligibility threshold has no rating, which says little about its safety.

## How does a subcontractor get its EMR letter?

1. **Ask your insurance agent or carrier.** They can issue a letter on letterhead showing your mod for each of the last three rating effective dates. This is what most GCs expect.
2. **Get the worksheet from NCCI.** In NCCI states, an employer can retrieve its own experience rating worksheet through NCCI's Worksheets On Demand at worksheets.ncci.com.
3. **Use your state bureau.** In California, New York, Pennsylvania, and the other independent bureau states, the mod comes from that bureau; your agent can pull it, and in California it is published through WCIRB Connect.
4. **Not rated?** Ask the agent for a letter saying the business is not experience rated, so the GC does not read the gap as a missing document.

Keep the letter in the same place as your certificate of insurance so you can send both at once. See [subcontractor prequalification](https://complysub.agntwrk.com/guides/subcontractor-prequalification) for the rest of the packet.

## How does EMR pair with OSHA 300A logs?

The EMR is built from insurance claim costs. OSHA logs count recordable injuries and illnesses. Many prequalification forms ask for both.

- A construction company that had more than 10 employees at any time in the last calendar year must keep OSHA injury and illness records. Construction is not a partially exempt industry.
- The Form 300A annual summary is certified by a company executive and posted from February 1 to April 30 of the following year.
- Records are kept for five years after the year they cover.
- From the 300A, a GC can compute a total recordable incident rate: cases in columns H, I, and J, times 200,000, divided by hours worked. The DART rate uses columns H and I only.

A low EMR with high recordable rates, or the reverse, is worth a question. Workers' comp exemptions also matter here: an owner with no employees may have no policy and no mod. See [workers' comp exemptions for sole proprietors](https://complysub.agntwrk.com/guides/workers-comp-exemptions-sole-proprietors) and [insurance requirements by trade](https://complysub.agntwrk.com/guides/gc-insurance-requirements-by-trade).

This is general information. Your agent or rating bureau can explain your own worksheet.

## Where ComplySub fits

ComplySub reads the workers' compensation section of each subcontractor's certificate of insurance and checks it, with the rest of the certificate and the license, against your requirements, then reminds the vendor and their agent before anything expires. It does not calculate or verify an EMR.

[Try ComplySub free](https://complysub.agntwrk.com/login)

_This guide is general information, not legal or insurance advice. Insurance and licensing rules vary by state, carrier, and contract; confirm what applies to you with your insurance professional, attorney, or licensing board._